Correlation Between LDG Investment and Hoang Huy
Can any of the company-specific risk be diversified away by investing in both LDG Investment and Hoang Huy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LDG Investment and Hoang Huy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LDG Investment JSC and Hoang Huy Investment, you can compare the effects of market volatilities on LDG Investment and Hoang Huy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in LDG Investment with a short position of Hoang Huy. Check out your portfolio center. Please also check ongoing floating volatility patterns of LDG Investment and Hoang Huy.
Diversification Opportunities for LDG Investment and Hoang Huy
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LDG and Hoang is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding LDG Investment JSC and Hoang Huy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoang Huy Investment and LDG Investment is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on LDG Investment JSC are associated (or correlated) with Hoang Huy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoang Huy Investment has no effect on the direction of LDG Investment i.e., LDG Investment and Hoang Huy go up and down completely randomly.
Pair Corralation between LDG Investment and Hoang Huy
Assuming the 90 days trading horizon LDG Investment JSC is expected to generate 1.0 times more return on investment than Hoang Huy. However, LDG Investment is 1.0 times more volatile than Hoang Huy Investment. It trades about -0.04 of its potential returns per unit of risk. Hoang Huy Investment is currently generating about -0.05 per unit of risk. If you would invest 184,000 in LDG Investment JSC on October 30, 2024 and sell it today you would lose (5,000) from holding LDG Investment JSC or give up 2.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LDG Investment JSC vs. Hoang Huy Investment
Performance |
| Timeline |
| LDG Investment JSC |
| Hoang Huy Investment |
LDG Investment and Hoang Huy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LDG Investment and Hoang Huy
The main advantage of trading using opposite LDG Investment and Hoang Huy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LDG Investment position performs unexpectedly, Hoang Huy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hoang Huy will offset losses from the drop in Hoang Huy's long position.| LDG Investment vs. Development Investment Construction | LDG Investment vs. An Phat Plastic | LDG Investment vs. Transport and Industry | LDG Investment vs. Plastic Additives JSC |
| Hoang Huy vs. Petrolimex International Trading | Hoang Huy vs. MST Investment JSC | Hoang Huy vs. Thong Nhat Rubber | Hoang Huy vs. Southern Rubber Industry |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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